nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2005‒09‒11
sixteen papers chosen by
Bernardo Batiz-Lazo
Bristol Business School

  1. Seventy Years of Central Banking: The Bank of Canada in International Context, 1935-2005 By Michael D. Bordo; Angela Redish
  2. Apparel Prices 1914-93 and the Hulten/Brueghel Paradox By Robert J. Gordon
  3. Antidumping : a problemin international trade By Zanardi,Maurizio
  4. Business Cycle Accounting for the Japanese Economy By Keiichiro Kobayashi; Masaru Inaba
  5. Collateral Damage: Trade Disruption and the Economic Impact of War By Reuven Glick; Alan M. Taylor
  6. El nacimiento de la Ciencia en los Presocráticos By Joel Sebastián Schneider
  7. The Incredible Volcker Disinflation By Marvin Goodfriend; Robert King
  8. The Methods and Careers of Leading American Painters in the late Nineteenth Century By David W. Galenson
  9. Top Incomes in Sweden over the Twentieth Century By Roine, Jesper; Waldenström, Daniel
  10. Fiscal Rules and Targets and Public Expenditure Management: Enthusiasm in the 1990s and its Aftermath By Hideaki Tanaka
  11. Carl Barks: A classical economist? By Gunnar Bårdsen
  13. Heritage and Agglomeration: The Akron Tire Cluster Revisited By G. Buenstorf; S. Klepper
  14. The Revolution Within: ICT and the Shifting Knowledge Base of the World’s Largest Companies. By Sandro Mendonça
  15. The Grip of History and the Scope for Novelty: Some Results and Open Questions on Path Dependence in Economic Processes By Carolina Castaldi; Giovanni Dosi
  16. Trade Policy at the Crossroads - The Indonesian Story By David Vanzetti; Greg McGuire; Prabowo

  1. By: Michael D. Bordo; Angela Redish
    Abstract: On the seventieth birthday of the Bank of Canada, we evaluate the Bank's contribution to monetary policy in an international context. We focus on: the reasons for the establishment of the central bank in 1935, its unique record of floating in a sea of fixed currencies under Bretton Woods; its experience with the Great Inflation and monetarism; its pioneering adoption of inflation targeting; and recent innovations in the payments and the phasing out of reserve requirements.
    JEL: E58
    Date: 2005–08
  2. By: Robert J. Gordon
    Abstract: Backcasting upward bias in price index over long periods of time yields levels of real consumption two or four centuries ago that are implausibly low, raising the possibility that price index bias for important products may have been zero or even negative at some point in the past. This paper studies apparel prices over the long period 1914-93, developing new price indexes based on more than 16,000 data observations from the Sears catalog for that interval. The basic conclusion is that hedonic price indexes for womens' dresses exhibit a rate of increase of many orders of magnitude faster than either the Sears Matched-model index developed from the same source data or as compared to the CPI. The results provided here offer a complement to past research on computer prices, which also found that price changes were contemporaneous with model changes. Just as hedonic price indexes for computers almost always drop faster than matched-model indexes for computers, we have found the opposite relationship for apparel prices, although presumably for the same reason. The Sears matched-model indexes do not exhibit a consistent negative or positive drift relative to the CPI. For womens' apparel the drift is always negative but for mens' apparel there is a turnaround, from negative before 1965 to positive thereafter. Both the matched- model indexes and the CPI rise less rapidly for womens' apparel than for mens' apparel, which would be consistent with the hypothesis that price changes accompanying model changes (and thus linked out of both the Sears matched-model index and of the CPI but not in the hedonic index) are more frequent for womens' apparel, since models change more frequently.
    JEL: E31 I31 N32 N62 O47 R21 R31
    Date: 2005–08
  3. By: Zanardi,Maurizio (Tilburg University, Center for Economic Research)
    Abstract: When in 1923 Jacob Viner wrote the book "Dumping: A Problem in International Trade", he probably did not imagine that the system put in place to eliminate the effects of dumping (i.e. antidumping) would surge to be a problem. However, as we celebrate the 100th anniversary of the first antidumping law, the situation is quite different from what Viner could observe at the beginning of last century. And if his economic analysis on the nature and causes of dumping is still valid, since the early 1990s the debate has centered on the widespread use and consequences of antidumping, which is just a modern protectionist tool used by many countries. This paper documents the evolution of antidumping from its early days by looking at the number of countries adopting antidumping laws and various statistics pertaining to the total caseload. One striking result is the important role of new users of antidumping, with negative consequences not only for traditional users.
    Keywords: WTO;antidumping; trade liberalization;GATT
    JEL: F13 F14
    Date: 2005
  4. By: Keiichiro Kobayashi; Masaru Inaba
    Abstract: We conducted business cycle accounting (BCA) using the method developed by Chari, Kehoe, and McGrattan (2002a) on data from the 1980s--1990s in Japan and from the interwar period in Japan and the United States. The contribution of this paper is twofold. First, we find that labor wedges may have been a major contributor to the decade-long recession in the 1990s in Japan. We argue that the deterioration of the labor wedge may have been caused by sticky wages and monetary contraction, and it may have been prolonged by the continuation of asset-price declines through binding collateral constraints. Second, we performed an alternative BCA exercise using the capital wedge instead of the investment wedge to check the robustness of BCA implications for financial frictions. The accounting results with the capital wedge imply that financial frictions may have had a large depressive effect during the 1930s in the United States. This implication is the opposite of that from the original BCA findings.
    Date: 2005–09
  5. By: Reuven Glick; Alan M. Taylor
    Abstract: Conventional wisdom in economic history suggests that conflict between countries can be enormously disruptive of economic activity, especially international trade. Yet nothing is known empirically about these effects in large samples. We study the effects of war on bilateral trade for almost all countries with available data extending back to 1870. Using the gravity model, we estimate the contemporaneous and lagged effects of wars on the trade of belligerent nations and neutrals, controlling for other determinants of trade. We find large and persistent impacts of wars on trade, and hence on national and global economic welfare. A rough accounting indicates that such costs might be of the same order of magnitude as the "direct" costs of war, such as lost human capital, as illustrated by case studies of World War I and World War II.
    JEL: D74 F02 F10 F14 H56 N40 N70
    Date: 2005–08
  6. By: Joel Sebastián Schneider
    Abstract: Este trabajo analiza el nacimiento de la ciencia en la antigua Grecia entre los pensadores presocráticos. Se destacan tres aspectos, en primer lugar que es entre los presocráticos donde se produce el paso del mito al logos. En segundo lugar, que sus ideas han sido precursoras de muchas teorías científicas de la modernidad. Y en tercer lugar, este trabajo propone un concepto al que se denomina principio de ignorancia o duda, el cual destaca la imposibilidad del hombre de conocer la verdad del mundo, al menos con la simple experiencia de los sentidos. A partir de este principio, cuya existencia se demuestra acudiendo a las fuentes de los escritos presocráticos, se concluye en que, al tomar conciencia éstos de que la realidad es muy compleja, dan impulso a la búsqueda del conocimiento mediante la razón, dando así origen a la ciencia.
    Date: 2005–09
  7. By: Marvin Goodfriend; Robert King
    Abstract: Using a simple modern macroeconomic model, we argue that the real effects of the Volcker disinflation in the early 1980s were mainly due to imperfect credibility, evident in volatility and stubbornness of long-term interest rates. Studying recently released transcripts of the Federal Open Market Committee, we find -- to our surprise -- that Volcker and other FOMC members also regarded long-term interest rates as key indicators of inflation expectations and of their disinflationary policy's credibility. We also consider the interplay of monetary targets, operating procedures, and credibility during the Volcker disinflation.
    JEL: E3 E4 E5 N1
    Date: 2005–08
  8. By: David W. Galenson
    Abstract: Although American painters of the late nineteenth century were much less influential than their European counterparts, the methods and careers of the leading American artists of the period reflect the same division between visual and conceptual approaches that characterized French art. The conceptual painters Thomas Eakins and John Singer Sargent matured early, and made individual landmark paintings, whereas the experimentalists Mary Cassatt, Winslow Homer, Albert Pinkham Ryder, and James McNeill Whistler developed more slowly, and made their contributions gradually in larger bodies of work. These American artists were less innovative than their French contemporaries, but they created approaches to art no less considered than those of their more famous counterparts.
    Date: 2005–08
  9. By: Roine, Jesper (Dept. of Economics, Stockholm School of Economics); Waldenström, Daniel (Dept. of Economics, Stockholm School of Economics)
    Abstract: This paper presents homogenous series of top income shares in Sweden from 1903 to 2003 using individual tax returns data. We find that Swedish top incomes have developed more similarly to the US, Canada and the UK than to other continental European countries when capital gains are included. The top income shares are U-shaped over time, falling steadily until around 1980 when they start increasing again. Around 2000 they reach levels similar to those found around 1950, before the expansion of the Swedish welfare state. However, unlike the Anglo-Saxon countries, where the recent increases were mainly driven by increased wage earnings inequality, Swedish top income shares have risen almost exclusively due to capital gains, a finding consistent with relatively high marginal wage taxes and internationally high price increases in financial and real estate markets since 1980. When excluding capital gains the increase in top income shares since 1980 almost disappears and the Swedish experience looks more like that of continental Europe. Furthermore, we also find that the largest decrease of top income shares happens between 1935 and the beginning of the 1950s, but not (as in the US and in France) during the war years, but before 1939 and after 1945 suggesting that the Swedish development was more driven by policy than by exogenous shocks.
    Keywords: Income inequality; Top incomes; Sweden; Taxation
    JEL: D31 H20 J30 N30
    Date: 2005–08–15
  10. By: Hideaki Tanaka (Australia–Japan Research Centre, The Australian National University, Canberra)
    Abstract: The 1990s saw an era of fiscal consolidation in industrialised countries, which struggled with fiscal deficits throughout the 1970s and 1980s. Reforms in public expenditure management, typically the introduction of fiscal rules and targets, together with favourable economic growth contributed to a significant improvement in fiscal positions. However, fiscal deficits have been increasing again since the turn of the 21st century in many OECD countries. Interestingly, some countries have been able to maintain fiscal discipline since the achievement of fiscal balance in the latter half of the 1990s. What has caused this difference? This paper derives important lessons for reform in public expenditure management from the experiences of major OECD countries’, including Australia, France, Germany, Japan, the Netherlands, New Zealand, Sweden, the UK and the USA. Essentially, success in maintaining fiscal discipline lies in maintaining a firm political commitment, and strengthening expenditure management that underpins any such commitment, specifically a medium-term fiscal plan in line with fiscal rules and targets in a centralised and transparent manner. Public expenditure management reform is a cornerstone of the restructuring of public sector services, especially in welfare programs aimed at overcoming problems arising from an aging population.
    Keywords: fiscal deficit, public expenditure management, OECD, Australia, France, Germany, Japan, Netherlands, New Zealand, Sweden, UK, USA, welfare programs, aging population
    JEL: O23 H87 E63
    Date: 2005–01
  11. By: Gunnar Bårdsen (Department of Economics, Norwegian University of Science and Technology)
    Abstract: The paper gives an introduction to the economic theories of Carl Barks using an interpretation of his analysis of cyclone money as an example.
    Date: 2005–04–03
  12. By: Edda Claus; Iris Claus
    Abstract: New Zealand's economic reforms beginning in 1984 have been one of the most radical and comprehensive programme of structural adjustment amojng OECD countries. This paper provides an empirical assessment of how New Zealand's production structure has changed since the early 1970s. The methodology used is inout output analysis. The study is undertaken at the 25-industry level using inter industry transactions for 1971-72, 1976-77, 1981-82, 1986-87, 1990-91 and 1994-95. The results shoe that some industries have been subject to large structural change and that shifts in New Zealand's patterns of industrial activity have occurred.
    JEL: C67 L16
    Date: 2005–07
  13. By: G. Buenstorf; S. Klepper
    Abstract: We use new data on the location and background of entrants into the U.S. tire industry to analyze the factors that caused the industry to be so regionally concentrated around Akron, Ohio, a small city with no particular advantages for tire production. We analyze the states where firms entered and for the Ohio entrants the counties where they originated and entered, and we conduct various analyses of how proximity to other tire firms and to demanders affected the longevity of tire producers. We also examine how the heritage of the Ohio entrants influenced their longevity. Our findings suggest that the Akron tire cluster grew primarily through a process of organizational reproduction and heredity rather than through agglomeration economies, as has been commonly posited by scholars of the industry.
    Date: 2005–08
  14. By: Sandro Mendonça
    Abstract: This empirical paper analyses the importance of information and communications technologies (ICT) in the technological diversification trend among the world’s largest manufacturing firms during the 1980s and 1990s. The objective of the research is twofold: firstly, to emphasise the emerging differences among technologies when companies from different industries patent outside their traditional technological capabilities; secondly, to investigate whether the tendency among large companies from all industries to patent in ICT is distinctive when compared with the tendency to patent in other technologies. We find that technological diversification in large companies has clearly occurred in ICTs. Non-ICT specialist industries increasingly develop, rather than just utilise, the cluster of ICT-related technologies. We conclude that the development of corporate capabilities in the key technologies of the emerging ICT paradigm is more widespread than previously emphasised in the literature. One implication of this observation is that technological diversification and the information revolution may be related phenomena.
    Keywords: Technological diversification, Large firms, ICT, Patents.
  15. By: Carolina Castaldi; Giovanni Dosi
    Abstract: -
    Keywords: Path dependence, irreversibility, increasing returns, learning, lock-in.
  16. By: David Vanzetti (Asia Pacific School of Economics and Government, The Australian National University); Greg McGuire (United Nations Support Facility for Indonesia Recovery); Prabowo (United Nations Support Facility for Indonesia Recovery)
    Abstract: Indonesia provides an interesting case study of the potential benefits and costs of alternative trade strategies that are under active consideration in many developing countries. The ASEAN region has recently announced a deepening of its commitments and is considering widening the agreement to include countries such as China, Japan and the Republic of Korea. A bilateral agreement with the United States is also a possibility. Against this background, Indonesia’s options on trade policy range from increasing protection to actively pursuing bilateral, regional and multilateral initiatives.
    Keywords: Indonesia, trade policy, United States, US, ASEAN, Japan, bilateral agreement, protection, incentive
    JEL: F13 O31 F14 F15
    Date: 2005–01

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